The Nigerian stock market has been dominated by a bullish trend against the backdrop of the Gross Domestic Product, GDP, which reported a 2.51% rise in the second quarter of 2023, Q2’23, a considerable drag below both the first quarter result and experts’ predictions.
Vanguard reported that the Nigerian Exchange Limited, NGX, All-Share Index, ASI, increased by 1.3% Week-on-Week, WoW, to close at 65,558.91 points, driven by investor interest in BUA Foods, which increased by 7.9%, Dangote Sugar, which increased by 35.7%, and Transcorp, which increased by 39.4%.
As a result, the MtD and YtD increases increased to 0.6% and 26.3%, respectively.
In terms of activity, total trading volume climbed by 7.3% WoW while trade value decreased by 0.4% WoW.
Sectorally, the Consumer Goods Index increased by 11.6% and the Insurance Index increased 1.20%, while the Banking Index decreased -3.6% and the Oil and Gas Index decreased -2.4%. The Industrial Goods Index finished unchanged.
“However, the market’s continued reaction to rising T-bill rates, combined with renewed interest in bargains and portfolio realignments, remains a focal point.” Meanwhile, we continue to advise investors to buy stocks with strong fundamentals.”
Analysts at InvestData Consulting also commented, saying, “We expect mixed sentiment as the market reacts to high Treasury bill rates and a hyperinflationary environment of 24.1% rate in the midst of bargain hunting and portfolio repositioning ahead of first-tier banks earnings reports expectations and sector rotation persists.”
Cordros Research analysts commented on the market forecast, saying, “Looking ahead, we expect investors’ sentiments to be influenced by developments in the macroeconomic landscape and the movement of yields in the fixed-income market.
“Overall, we reaffirm the importance of investing primarily in fundamentally good businesses, as the negative economic environment continues to be a big headwind for corporate earnings.”
According to Cowry Asset Management Limited experts, “the current trend of buoyant sentiment is expected to continue, supported by the ongoing digestion of robust economic data highlighting Nigeria’s commendable output performance and growth.”
“However, the market’s continued reaction to rising T-bill rates, combined with renewed interest in bargains and portfolio realignments, remains a focal point.” Meanwhile, we continue to advise investors to buy stocks with strong fundamentals.”
Analysts at InvestData Consulting also commented, saying, “We expect mixed sentiment as the market reacts to high Treasury bill rates and a hyperinflationary environment of 24.1% rate in the midst of bargain hunting and portfolio repositioning ahead of first-tier banks earnings reports expectations and sector rotation persists.”
